Report Cites Profits of Big Landlords Using RealPage

A report by a progressive watchdog group called cites six big corporate landlords using RealPage rent-setting software and profits

A report by a progressive watchdog group called cites six big corporate landlords using RealPage rent-setting software and how much those companies have raised rents.

Three of the companies mentioned in the report are headquartered in Atlanta, according to a report in the Atlanta Journal-Constitution.

National Multifamily Housing Council, a public policy group representing the multifamily housing industry, disputed the group’s conclusions. Its president, Sharon Wilson Géno, noted that the multifamily rental industry was grappling with rising insurance rates, construction costs, and local and state taxes, in addition to other inflationary pressures.

“What’s really driving rental prices is the shortage of housing in the United States,” Géno told the newspaper. “Anytime you have a shortage, pricing is going to go up.”

Also, the newspaper reported looked at the profits of Germantown, Tennessee-based Mid-America Apartments; AvalonBay Communities of Arlington County, Va.; Chicago-based Equity Residential; Essex Property Trust, which has headquarters in San Mateo, Calif.; UDR of Highlands Ranch, Colo.; and Camden Property Trust, based in Houston.

The report on the six multifamily apartment companies found they had $300 million in combined profits during the first financial quarter of 2024. The watchdog group attributes the rising profits, at least in part, to rent increases.

Highlights of the watchdog company’s findings on the six companies:

  • Mid-America Apartments saw its net income jump 6% to $147.6 million, allowing the company to spend $176.2 million on shareholder dividends and distributions.
  • AvalonBay Communities saw its net income increase 18% to $173.6 million as its “rental and other income” revenue increased 5.6% to $711.1 million. At the same time, the company’s “management, development and other fees” jumped 68.4% to nearly $1.8 million.
  • Equity Residential’s net income climbed 39% to $305 million with its “same-store average rental rates” increasing 3.4% to $3,077. Equity Residential spent $38.5 million on stock buybacks as its CEO said housing costs were rising due to a national shortage and that rent controls and other measures wouldn’t solve housing affordability.
  • Essex Property Trust’s net income increased 76% YoY to over $285.1 million, based on its “average monthly rental rate” increasing 2.1%.
  • UDR saw its net income increase 41% YoY to over $46.3 million, up from $32.9 million in Q1 2023.
  • In Q1 2024, Camden Property Trust saw its net income increase 97% to $85.8 million as it spent $50 million on stock buybacks, partly thanks to its “weighted average monthly rental rate” jumping 1.8% YoY. The company was also sued in February 2024 by the Arizona attorney general as one of several large landlords that allegedly “conspired to illegally raise rents for hundreds of thousands of Arizona renters” through RealPage, including Phoenix and Tucson residents who have seen prices rise 30% over the previous two years.

Liz Zelnick, an executive at the group, told that the nonprofit analyzed the six largest publicly traded apartment companies’ financial reports and listened in on earnings calls. She said between them, the companies own close to 350,000 units. “There are so many people who are struggling to pay their rent right now. We’re seeing that corporate landlords are buying up more and more properties across the country and they’re maximizing profits, they’re raising rents, and now they’re utilizing RealPage, which is essentially price-fixing,” she said.

The FBI searched property-management company Cortland Management’s headquarters in Atlanta in an unannounced search in May, according to several reports, as part of a multifamily rent price-fixing investigation.

National apartment developer Cortland Management’s Atlanta office was searched by the FBI under a limited search warrant, a representative for Cortland confirmed. The warrant was connected to an investigation by the Department of Justice (DOJ) into potential antitrust violations in the multifamily housing industry, according to a statement from Cortland.

The FBI property management search is part of a criminal antitrust investigation by the DOJ into allegations that Cortland and other property management companies have been involved in a conspiracy to artificially inflate apartment rents.

“We are cooperating fully with that investigation, and we understand that neither Cortland nor any of our employees are ‘targets’ of that investigation,” Cortland said in a statement. “Due to the ongoing litigation, we cannot comment further at this time.”

Multiple tenants across the country have sued RealPage, claiming the tech company’s apartment software helped landlords collude to inflate rents. The lawsuits from around the country were consolidated in federal court in Nashville.